[investment points]

Recently, Actronic released its semi-annual report of 2022. Through continuous cultivation in the field of automotive electronics, the company has actively expanded its downstream customers, expanding the volume of new and old projects, distribution business and self-developed IC business have increased greatly compared with the same period last year. During the reporting period, the company achieved an operating income of 977 million yuan, an increase of 55.42% over the same period last year, and a net profit of 77 million yuan, a year-on-year increase of 134.79%.

The growth rate of profit is much higher than that of income, and the company's profit level has increased significantly, in line with expectations.

Self-research business leads to a high level of gross profit, and strives for progress in a stable business situation. 2022H1's gross profit margin was 21.44%, up 3.51pct from a year earlier. In terms of products, the gross profit margin of the electronic components distribution business was 18.92%, an increase of 1.96pct over the same period last year, while the gross profit margin of self-developed IC products was 46.37%, a substantial increase in 11.5pct over the same period last year. From the expense point of view, affected by the rapid expansion of business, the company's three-fee expenditure increased slightly, totaling 8.59%, an increase of 1.70pct over the same period last year.

The company continued to increase its R & D investment, with R & D expenditure of 20 million yuan in the first half of the year, an increase of 15.14% over the same period last year. The company's debt-paying ability is sound, with the flow and quick ratio of 2.34 and 1.81 respectively during the reporting period, up 26.07% and 25.25% from the same period last year. The operating capacity increased steadily, and the turnover days of the company's accounts receivable in the first half of the year was 111.06 days, compared with 118.51 days in the same period last year. The account period was slightly shortened.

Domestic automotive specification-level power management IC leading designers and manufacturers, continue to develop the automotive electronics market. According to the data of TransparencyMarketResearch consultancy, the global power management chip market is expected to reach 56.5 billion US dollars by 2026, and China's power management chip market is expected to grow from 11.8 billion US dollars to 23.5 billion US dollars.

At present, the company's self-developed IC products include motor drive IC, LED driver IC, LDO, DC-DC and other chips. Compared with competitive products, the company's products use the latest technological research and development achievements and experience, effectively absorb the advantages of competitive products used in the original market for many years, and improve their disadvantages, so the products are more competitive. With the continuous improvement of the penetration of new energy vehicles and the continuous promotion of the "three modernizations" of cars, the space of analog chips in the automobile market is expected to be further opened, and the company is expected to accelerate to seize market share.

Give full play to the channel advantages of distributors and quickly develop end customers. The company's IC products have the characteristics of high concentration, less product segmentation and high business focus, and related products have passed the AEC-Q100 automobile regulation level certification and successfully introduced into domestic and foreign well-known automobile manufacturers such as Geely, Great Wall, Changan, BYD, Hyundai, FAW, Kia, Chrysler, Volkswagen, XPeng Inc., ideal, etc., to achieve batch shipment through Tire1 or Tire2. In the first half of 2022, the sales volume of the company's self-developed IC was 82.54 million yuan, up 211.19% from the same period last year. In the process of cooperation with customers, it gained certain recognition in the field of automotive electronics, established a good market reputation, and occupied a place in the domestic automotive power management IC market.

[investment advice]

With the continuous improvement of automobile electrification, intelligence and networking, the bicycle value of electronic components continues to rise, the demand for specification-level components with motor vehicles is growing rapidly, and the prosperity of the industry continues to improve. In addition, according to ICInsights statistics, the global shipments of integrated circuit products in 2019 were about 301.7 billion, of which power management chips accounted for 21% of the total shipments, and about 63.969 billion were shipped, which exceeded the combined shipments of the second and third categories, and had a huge market demand.

We maintain the original profit forecast, and expect the company's operating income in 2022, 2023, and 2024 to reach 2.256, 2.985, and 38.96 billion yuan in 2024. Affected by the accelerated volume of self-developed IC business, the superimposed high-margin power management IC effectively optimizes the product structure, and is expected to return to the mother net profit of 1.800.900.49 million yuan, EPS respectively 2.25cusp 3.63cusp 5.61 yuan, the corresponding PE is 39-24-16 times. Taking into account that the self-developed PMIC business is still rising in the initial stage, there is plenty of room for domestic replacement in the future to maintain the "buy" rating.

[risk Tip]

Risk of global wafer manufacturing capacity shortage

Risk of demand decline in automobile market

Risk of technology development and iterative upgrade.